Aer Lingus has rejected an improved offer from British Airways parent company IAG.
The Irish carrier turned down an offer of €2.40 a share, compared to a €2.30 previously offered last year.
IAG issued a statement saying that "there can be no certainty that any further proposal or offer will be forthcoming".
One of the main attractions of the deal for IAG is Aer Lingus’ valuable take-off and landing slots at British Airways’ main base at Heathrow. The Irish carrier is the third largest airline at the airport.
A deal would require the approval of Ryanair, which owns a 29.8 per cent stake in Aer Lingus, the Irish government, which has a 25 per cent stake, and the European Commission.
The offer came days after Aer Lingus published its annual traffic results in which it saw passenger numbers rise by 3.2 per cent year-on-year.
However, in the month of December traffic dropped by 705,000 due to an 8.2 per cent fall in short-haul numbers to 517,000 compared to the same period in 2013.